Walking through the doors of France’s first ever, newly opened Costco in Villebon-sur-Yvette, is like crossing an invisible boundary, where you leave one culture behind and enter into a completely different world. From the friendly greeting by welcome staff at the store’s entrance, to the cashier who packs your purchases, the whole visit is accompanied by a sense of being valued, a feeling which goes beyond that of a purely transactional relationship. CEO Gary calls it the ‘Costco culture’; a hybrid of that ‘back home’ feeling and having access to both French and U.S. produce, which comes as a very welcome experience to many expats. It is difficult not to be impressed by the 148,000 square feet warehouse, home to some 3,400 products, just waiting to be discovered. Marc, Senior Purchasing Director, compares the experience to a treasure hunt, and I agree. Each ‘treasure’ is, of course, valued on a personal level, and I’ve found mine! Something that is available in any supermarket back home, but nowhere in Paris, until now – Walkers (not Lays) multipack crisps. They have been a regular item on my wish list when friends and family visit from England, but now I no longer have to burden anyone else with protecting my precious potato petals from the perils of travelling. Costco is their (and my) saviour!
Strolling around the warehouse, you come across a variety of product demonstrations from massage chairs to cheese tasting. The product and service ranges are diverse: electronics, food, beverages, cosmetics, health supplements…There is even an in-store hearing aid department and an optician’s offering branded frames (Mont Blanc and Celine). This latter is run by Jean-Charles, whom I had spoken with before. He is, quite possibly, the most delightful optician I have ever met, and will happily walk you through everything from frames, rates and brands to treatments.
I also had the pleasure of meeting with the team behind the launch of Costco France. There were no suits or ties and no mention of position during the introductions. Everyone, from cashier to CEO, is on first name terms with each other. In fact, the suggestion of addressing management as Monsieur or Madame brings a smile to their faces. That culture is left at the door when you arrive. There are no titles on the staff badges worn in the store either, just a total respect for everyone and for the job they are doing. This mind-set is presumably nurtured by Costco’s career path, which means that everyone, even the directors I met with, started at the bottom of the ladder. To this day it is not uncommon for Gary to help out on the deli counter, or for Marc and Financial Director Christine to help out on the checkouts.
Why did Costco decide to open in France?
Gary: Costco sells quality products at the best price. So, imagine a country where most luxury brands were born, a country they call «le pays de la gastronomie», where people like amazing food and pastries. For a company that sells high-end goods of the best quality possible, coming to a country like France makes total sense. The other thing is that Costco operates very well in high density cities. France is not a big country in terms of square metres, but it does have a lot of people. We think of France as a great place to do business.
You opened on 22nd June this year.
Gary: This was probably the worst date we could have ever picked to open! Why? Firstly we opened between two seasons. For people who understand our concept, it’s ‘early in, early out’. We like to be very early in with the spring products, so that by the time spring hits, we’ve got summer products, by the summer we have ones for the fall etc. June being between spring and summer meant it was difficult for Marc to figure out what the inventory was going to be. He and his team did it fantastically. We decided to go full spring, and had all the SKUs [stock keeping units] but with smaller quantities, so that we could transit into the summer faster. That was the strategy and it worked very well. Another reason it was the worst date: the following week was the sales period in France, when people can sell at any price they want for 6 weeks. We then got into the summer vacation, when France shuts down for the month of August and finally came September when people here have to pay their income tax… We are so happy now that we are in October! The business is steady and growing.
How are you doing in terms of membership?
Gary: We opened with 10,200 members and even though there were some pretty quiet periods over the summer, our sales were better than expected and we have grown our membership base to 47,000 so far (totalling 75,000 French cardholders), not taking into account expats and people who travel a lot and have a card from somewhere else in the world.
Christine: The majority of new members are local and this has been part of our marketing strategy on launch, communicating within a 10-15 km catchment area. This is our focus when launching in a new territory. Eventually people start to know Costco. It’s a growing process.
Gary: On the expat side, when we do international days or events at places such as the American School of Paris, we often have a membership kiosk where people can sign up. Often attendees are already members who have shopped at Costco UK, Canada or US. What they want to know is if a store is coming closer to them. They also want to know if we can bring certain products. My wife works at the American School of Paris as a volunteer, when she comes home she has a list of things people have asked if we can get. There’s always a shopping list of requested items.
Christine: Even local members are always looking for international products, not necessarily from the US.
Marie: Look at the massive dolls’ house for example, it’s the kind of product you would find in a speciality store and we have it.
Marc: What I like is that members are coming for the treasure hunt. Very often they walk all the aisles, taking their time to look at the products.
Gary: I agree with Marc. My two favourite member comments I’ve heard are first, a lady who visits every week who said “I want to make sure I’m not losing out on anything”, and another lady who described Costco as “The Disney for adults”.
How important is the mix between local and international suppliers?
Gary: One of the reasons Costco succeeds in all the countries we are in, is because we bring an international feel, (the membership club, the multipacks the different product conditioning), but we also add the local flavour. We’ve adjusted to the French market. What we can see since we’ve opened, is that people are requesting a lot of international products. They want the US/Canadian products, but they also want to know that we are working with small, local suppliers for produce like meat, cheese and wine. We are already working with 400 French suppliers. The messages we’ve been receiving so far are, “We love you guys because you’re so different” and “We love you guys because we can find things we can’t find elsewhere.” That’s going to be our challenge moving forward, to keep our customers wowed, excited with international products.
Marc: The only thing restricting us from supplying certain products are compliancy issues. There is EU compliancy and French specific compliancy. So sometimes members may ask for something they can get in Canada, but we would need to change the recipe to be compliant here. We try as much as we can. It’s works in progress. The goal is to bring different items and to replicate their success in the US and Canada -Thanksgiving products, Big Black Friday…
Jean-Yves: Members can also expect us to maintain our own specifications, for example, our chicken thigh is deboned and fats are removed.
Can you tell us about Ted, the Costco teddy bear?
Marc: In the beginning we used to give Ted to hospitals. We started with the big Ted and it became a popular item, so then with any new store opening we had to have Teds! If there’s a new market, we bring Ted. Eventually we had the smaller Ted too…
Gary quietly leaves the room, returning with a Ted in hand.
Gary: This costs 32,99 euros. There is no way you can get a teddy this size for that price anywhere else in France. We sell a lot of Teds here. It’s a new market. I like looking into the warehouse when I’m on the phone to see all the baskets coming in with the Teds. It’s funny. People come up to us and say “You guys run Costco – I’ve seen all the Ted stories.” Marie and Severine use Ted in their marketing programmes, so now everyone associates him with Costco. He’s become our mascot.
Marie: We found a creative way to market on Facebook. When we add Ted to our posts it produces a different reaction; people follow and engage with him. With Ted our marketing can be creative and have a fun story. Costco is about having fun.
Jean-Yves: Call me crazy, but when I relocated to France I brought my Ted with me.
Moving forward, can you share your expansion plans?
Gary: We hope to go into our second location, close to Paris, before the end of the year. We are visiting different sites in cities every 2 or 3 weeks. Our main focus has been opening, but our plan over the next 10 years is to open 4 to 6 buildings around Paris and 1 or 2 around other major cities. People don’t know, but last year, even though we didn’t have a store in France, we bought 800 million USD of products manufactured in France. For the economy that means in 10 years we’ll reach a 2 billion USD goal of products bought worldwide, creating 4,000-5,000 jobs, a logistics centre etc. If you look at demographics in France, everywhere you see an Ikea you can realistically see a Costco. We have the same demographics.
Costco is located at 3 Avenue de Bréhat, 91140 Villebon-sur-Yvette and open 6 days a week (Monday – Saturday). For more information visit www.costco.fr.
Interviewed: Gary Swindells (CEO), Marc Chapados (Non Food and Food Director), Jean Yves Mocquet (Fresh Food Director), Christine Januario (Financial Director), Marie Bouvier (Marketing Coordinator), Severine Nardin (Marketing Manager).